Q1 2024 Stereotaxis Inc Earnings Call
Speaker Change: [music].
Operator: Good afternoon. Thank you for joining us for Stereotaxis' 1st Quarter 2024 Earnings Conference Call. Certain statements during the conference call and question-answer period to follow may relate to future events and expectations and, as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the company in the future to be materially different from the statements that the company's executives may make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. However, we assume no duty to update these statements.
Good afternoon, and thank you. Thank you for joining us for Spirit, Texas first quarter 'twenty 'twenty four earnings conference call starting statements during the conference call and question and answer period to follow may relate to future events expectations and as such constitute forward looking statements within the meaning.
Of the private Securities Litigation Reform Act of 1995, such statements involve known and unknown risks uncertainties and other factors, which may cause actual results performance or achievements of the company in the future to be materially different from the statements that the company's.
Executives may make today. This fresh are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K, our 10-Q, we assume no Judy to update these statements.
Operator: At this time, all participants have been placed in a listen-only mode. The floor will be open for questions and comments following the presentation. As a reminder, today's call is being recorded. It is now my pleasure to turn the floor over to your host, David Fischel, Chairman and CEO of Stereotax.
Speaker Change: At this time, all participants have been placed on a listen only mode. The floor will be open for question and comments. Following the presentation. As a reminder, today's call is being recorded.
Speaker Change: It is now my pleasure to turn the floor over to your host David Vishal, Chairman and CEO of staggered DOCSIS.
David Leo Fischel: Thank you, Operator, and good afternoon, everybody. Our last call two months ago included a fairly comprehensive overview of Stereotaxis and our strategy. We'll keep today's call more brief.
David Leo Fischel: Thank you operator, and good afternoon, everyone.
David Leo Fischel: Our last call two months ago included a fairly comprehensive overview stereotactic and our strategy well.
David Leo Fischel: We will keep today's call more brief.
David Leo Fischel: I'll focus on three specific topics, our commercial results, progress in our comprehensive innovation strategy, and the acquisition of APT, which was just announced in a press release this afternoon. It's an exciting period with a lot of progress. Our commercial goal has been to maintain sales momentum and preserve our financial strength while preparing for a breakout enabled by our comprehensive innovation strategy. While the structural challenges of our old product ecosystem serve as a significant headwind, we continue to show commercial progress. Revenue in the first quarter grew 5% over the previous year, driven by increased robotic system sales.
Focus on three specific topics our commercial results.
David Leo Fischel: And our comprehensive innovation strategy.
David Leo Fischel: Acquisition of ADT, which was just announced in a press release this afternoon.
David Leo Fischel: It's an exciting period with a lot of progress.
David Leo Fischel: Our commercial goal has been to maintain sales momentum and preserve our financial strength, while preparing for a breakout enabled by our comprehensive innovation strategy.
David Leo Fischel: While the structural challenges of our old product ecosystem serve as a significant headwind we continued to show commercial progress.
David Leo Fischel: Our revenue in the first quarter grew 5% over the previous year driven by increased robotic system sales.
David Leo Fischel: We grew our system backlog since our last call with the receipt of two additional orders for Genesis robots. Both orders came from existing customers in Europe that are upgrading older labs to Genesys. The net impact of receipt of those orders and system revenue recognition in the first quarter has increased our current system backlog to $16 million.
David Leo Fischel: We grew system backlog since our last call with the receipt of two additional orders for Genesis robots.
David Leo Fischel: Both orders came from existing customers in Europe that are upgrading older labs to Genesis.
David Leo Fischel: The net impact of receipt of those orders and system revenue recognition in the first quarter has increased our current <unk>.
Log to $16 million.
David Leo Fischel: As discussed more fully on our last call, there remains a healthy, active pipeline of greenfield and replacement cycle customers for Genesys across our three key geographies, though the weaknesses in our historic product ecosystem, including the recurring catheter shortages of Johnson & Johnson, harm and delay purchase decisions. Our recent regulatory submissions of MAGIC and the positive clinical experience observed in our clinical trial partially help. Our recurring revenue remains impacted by J&J's catheter shortages, which is impacting procedure volume.
David Leo Fischel: As discussed more fully on our last call. There remains a healthy active pipeline greenfield and replacement cycle customers for Genesis across our three key geographies.
David Leo Fischel: The weaknesses in our historic product ecosystem, including the recurring catheter shortages of Johnson, <unk>, Johnson harm and delayed purchase decisions.
David Leo Fischel: A recent regulatory submission magic and a positive clinical experience observed in our clinical trials partially helps.
David Leo Fischel: Our recurring revenue remains impacted by J&J catheter shortages, which is impacting procedure volume.
David Leo Fischel: We continue to see inconsistent availability of the J&J catheters flare up in various geographies and accounts but expect overall recurring revenue in 2024 to be consistent with 2023. Our innovation strategy remains key to driving substantial commercial success, and we are making significant progress on multiple fronts. Stereotaxis' proprietary ablation catheter was submitted to the EU Notified Body and FDA during the first quarter. We were pleased with the responsiveness of both regulatory agencies.
David Leo Fischel: Continued to see inconsistent availability of the J&J catheters flare up in various geographies and accounts, but expect overall recurring revenue in 2024 to be consistent with 2023.
David Leo Fischel: Our innovation strategy remains key to driving substantial commercial success, and we are making significant progress on multiple fronts.
David Leo Fischel: There are taxes as proprietary ablation catheter was submitted to the EU notified body and FDA during the first quarter.
David Leo Fischel: We were pleased with the responsiveness of both regulatory agencies.
David Leo Fischel: In Europe, we received a completeness check shortly following submission of our CE application and soon after received a first round of clinical questions. We responded to those questions, and at the very end of last week, we received a single follow-up question. That question did not raise any concerns, and we intend to respond shortly.
David Leo Fischel: In Europe, we received a completeness check shortly following submission of our CE application and soon after received the first round clinical questions.
David Leo Fischel: We responded to those questions and at the very end of last week received a single follow up question.
David Leo Fischel: Question did not raise concern and we intend to respond shortly.
David Leo Fischel: We are still awaiting technical and biocompatibility questions, though note that there was substantial progress on those topics during the review last year. In the U.S., the FDA reviewed our PMA supplement and, during a collaborative discussion, determined to convert the submission into a traditional PMA. That conversion took place, and the traditional PMA is now going through its initial review, leveraging the data we continue to collect from the MAGIC study taking place in Europe, along with the broader body of preclinical and bench data.
We are still awaiting technical and biocompatibility question.
David Leo Fischel: Note that there was substantial progress on those topics during their review last year.
David Leo Fischel: In the U S. The FDA reviewed our PMA supplement and during a collaborative discussion determined to convert the commission into a traditional PMA.
David Leo Fischel: That conversion took place and the traditional PMA is now going through its initial review leveraging the data we continue to collect from the match study taking place in Europe, along with the broader body of preclinical and bench data.
David Leo Fischel: Enrollment in the European study has progressed well, with a continued perfect safety record for MAGIC and overall excellent performance. We plan to enroll additional patients in the study, appreciate the responsiveness and collaborative nature of both regulators, and look forward to working with them in the coming months to ensure the MAGIC catheter becomes available for patients and physicians who depend on it. Our second major innovation effort is the development of a smaller self-shielding robot to significantly enhance the accessibility of our technology.
David Leo Fischel: Enrollment in the European study has progressed well with the continued perfect safety record for magic and overall excellent performance.
David Leo Fischel: We plan to enroll additional patients in the study appreciate the responsiveness and collaborative nature of both regulators and look forward to working with them in the coming months ensure the magic catheter becomes available for patients and physicians who depend on it.
David Leo Fischel: Okay.
David Leo Fischel: Our second major innovation effort is the development of a smaller self shielding robot to significantly enhance accessibility of our technology.
David Leo Fischel: We are methodically working through the extensive testing needed for regulatory submission and have successfully completed the majority of all tests, with the robot performing very well. We continue to expect regulatory submissions in both the United States and Europe this quarter, with European regulatory clearance expected mid-year, followed by FDA clearance in the second half of the year.
We are methodically working through the extensive testing needed for regulatory submission and successfully completed the majority of our test with the robot performing very well.
David Leo Fischel: We continue to expect regulatory submissions in both the United States and Europe this quarter with European regulatory clearance expected mid year, followed by FDA clearance in the second half of the year.
David Leo Fischel: Following approval, we plan to use the current year to demonstrate the reality of the robot in real world use, enhance compatibility of the robot with various x-rays, and prepare our supply chain, manufacturing, installation, and commercial processes for a full launch in 2025. Our initial demonstrations of the robot to physician customers reinforce our confidence that the availability of a smaller and more accessible robot will serve as a significant structural improvement to the pace and scale of adoption.
David Leo Fischel: Following approval, we plan to use the current year to demonstrate the reality of the robot in the real world use enhanced compatibility of the robot with various X rays and prepare our supply chain manufacturing installation and commercial processes for a full launch in 2025.
David Leo Fischel: Our initial demonstrations of the robot physician customers reinforces our confidence that the availability of smaller and more accessible robot will serve as a significant structural improvement to the pace and scale of adoption.
David Leo Fischel: Our third effort is to expand the scope of our robot's value beyond electrophysiology into a broader range of endovascular indications. This has been predicated on the development of a family of robotically steered guide wires and guide caps.
David Leo Fischel: Our third effort is to expand the scope of our robots value beyond electrophysiology into a broader range of endovascular indications.
David Leo Fischel: This has been predicated on the development of a family of Robotically still guide wires and guide catheters.
David Leo Fischel: The ramp-up in manufacturing of the guidewire is slightly slower than expected, but we expect regulatory submissions later in the third quarter with commercial availability at the end of the year. The guide catheter is being manufactured by APT, and we are delighted to be bringing that project in-house with the APT acquisition. We expect the catheter to be commercially available in early 2025. In China, our partner, Microport, has submitted all the key aspects of our product ecosystem for regulatory approval and has been responding to questions from China's NMPA regulatory body.
David Leo Fischel: The ramp up in manufacturing of the Guidewire is slightly slower than expected, but we expect regulatory submissions later in the third quarter with commercial availability at the end of the year.
David Leo Fischel: The guide catheter is being manufactured by <unk> and we are delighted to be bringing that project in house with the ADT acquisition, we expected catheter to be commercially available in early 2025.
David Leo Fischel: In China, our partner Mike report is submitted all of the key aspects of our product ecosystem for regulatory approval and has been responding to questions from Chinese and MPA regulatory body.
David Leo Fischel: My report continues to expect approval of Genesis this summer and approval of the robotically navigated ablation catheter, as well as integration with their mapping system, before year end. Microport is ramping up training of its commercial team in anticipation of the launch, and we have begun a methodical program that provides group and one-on-one training on our robotic technology to all the approximately 100 members of the Microport EP clinical sales team. Our last key innovation effort is our digital surgery platform for broad operating room connectivity.
David Leo Fischel: Mike Report continues to expect approval of Genesis This summer and approval of the Robotically navigated ablation catheter as well as integration with their mapping system before year end.
David Leo Fischel: Mike report is ramping up training its commercial team in anticipation of the launch and we have begun methodical program that provides group and one on one training on our robotic technology to all approximately 100 members of the Michael Port EP clinical sales team.
David Leo Fischel: Our last key innovation effort is our digital surgery platform for broad operating room connectivity.
David Leo Fischel: The SYNC cloud-based connectivity app remains in limited release, during which time additional features and improvements are being incorporated as we await the launch of the Synchrony Integrated Lab Display. SYNCHRONY should begin formal regulatory testing in a couple months, with regulatory submissions later in the third quarter.
David Leo Fischel: The sink cloud based connectivity App remains in limited release during which time additional features and improvements are being incorporated as we await the launch of the synchrony in grenade integrated lab display.
David Leo Fischel: Synchroneyes should begin formal regulatory testing and a couple of months with regulatory submission later in the third quarter.
David Leo Fischel: While this is a synergistic and opportunistic venture to our core strategy, early feedback has been very positive, and I can see this being a substantial independent business in the coming year. We will dedicate a future event to showcase the technology. These innovations, each individually and especially in combination, are leaps forward clinically, commercially, and strategically to improve the care we can provide patients, the experience we provide physicians, and our ability to meaningfully scale a business with a healthier and more attractive revenue and cost profile.
David Leo Fischel: While this is a synergistic an opportunistic venture to our core strategy early feedback has been very positive and I can see this being a substantial independent business in the coming years, we will dedicate a future event to showcase the technology slowly.
David Leo Fischel: These innovations.
David Leo Fischel: Each individually and especially in combination are leaps forward clinically commercially and strategically.
David Leo Fischel: Prove the care, we can provide patients experience, we provide physicians and our ability to meaningfully scale, a business with a healthier and more attractive revenue and cost profile.
David Leo Fischel: As these key puzzle pieces come together, we are setting ourselves up with multiple shots on goal for breakout growth in 2025 and beyond. I want to recognize the Stereotaxis team driving this progress forward. It is amazingly impressive what our small team has been able to accomplish.
David Leo Fischel: As these key puzzle pieces come together, we are setting ourselves up with multiple shots on goal for breakout growth in 2025 and beyond.
David Leo Fischel: I want to recognize the stereotactic team driving this progress forward it.
David Leo Fischel: It is amazingly impressive what our small team has been able to accomplish the breadth of innovation the quality of our work and the ability to advance multiple projects forward in parallel as a lean team in a financially prudent fashion.
David Leo Fischel: The breadth of innovation, the quality of our work, and the ability to advance multiple projects forward in parallel as a lean team in a financially prudent fashion. We really have unique expertise and capabilities that are second to none, as we reflect on our experience advancing this wave of innovations over the past several years and look forward and strategize for the coming years. It became clear that one gap in our expertise is the lack of in-house capabilities to develop interventional disposal medical devices.
David Leo Fischel: We really have unique expertise and capabilities that are second to none.
David Leo Fischel: As we reflect on our experienced advancing this wave of innovations over the past several years and look forward and strategize for the coming years.
David Leo Fischel: Becomes clear that one gap in our expertise is the lack of in house capabilities to develop interventional disposal medical devices.
David Leo Fischel: Our reliance on various contract manufacturing partners has worked as a reasonable solution, but is unlikely to be ideal for a future in which we are driving robust innovation and manufacturing of a broad family of interventional devices that work with our robots. With that eye toward the future, I'm very excited that APP will be joining Stereotaxis in contributing that expertise and capability. Our acquisition of APT is opportunistic, synergistic, and strategic. By way of background, I was introduced to APT by highly respected electrophysiologists that were using APT's differentiated, manually navigated diagnostic catheters and wanted a robotically steered version made to work with Genesis.
David Leo Fischel: Our reliance on various contract manufacturing partners has worked as a reasonable solution, but it's unlikely to be ideal for a future in which we are driving robust innovation and manufacturing of a broad family of interventional devices that work with our robot.
David Leo Fischel: With that eye towards the future I am very excited that ADP will be joining stereo taxes, and contributing that expertise and capability.
David Leo Fischel: Our acquisition of ADT is opportunistic synergistic and strategic.
David Leo Fischel: By way of background I was introduced to HPT by highly respected electrophysiologist that we're using apt's differentiated menu will be navigated diagnostic catheters and wanted a robotically steered version made to work with Genesis.
David Leo Fischel: As we had the opportunity to engage with APT's team, we were impressed with their expertise and the quality of their work. We began collaborating to develop a unique high-density mapping gap, the first magnetically, robotically steered diagnostic catheter for our community of robotic users. As that collaboration advanced well, we expanded our efforts to include a vascular guidance gap.
David Leo Fischel: As we had the opportunity to engage with Apt's team, we were impressed with their expertise and the quality of their work we.
David Leo Fischel: We began collaborating to develop a unique high density mapping catheter first magnetically robotically steered diagnostic catheter for a community of robotic users.
David Leo Fischel: As that collaboration advanced while we expanded our efforts to include our vascular guidance catheter.
David Leo Fischel: Earlier this year, the opportunity emerged to consider bringing APT into Stereotaxis. An acquisition made a lot of sense from a commercial and strategic perspective, and we appreciate that we were able to reach agreement on a transaction that ensured a long-term alignment of interests and was financially prudent. From a commercial perspective, APT currently distributes, uses distributors, and sales agents around the world to sell its caps. A substantial majority of these sales come from outside the U.S.
David Leo Fischel: Earlier this year the opportunity emerge to consider bringing apt's into stereo taxes.
David Leo Fischel: An acquisition made a lot of sense from a commercial and strategic perspective, and we appreciate that we were able to reach agreement on a transaction that ensured long term alignment of interest and was financially prudent.
David Leo Fischel: From a commercial perspective Apt's currently distributes uses distributors and sales agents around the world to sell its catheters are.
A substantial majority of these sales come from outside the U S.
David Leo Fischel: The opportunity for these differentiated high-quality catheters in the U.S. is meaningful, but it requires a dedicated sales team, which Stereotaxis can provide with synergies from a practical and messaging perspective. Stereotaxis has over 20 people in the field across the U.S. who are particularly skilled and focused on enabling and improving the treatment of the most complex arrhythmias. APT's catheters have the potential to contribute incremental value and revenue to the practices our team already calls upon and to serve as a door opener at centers focused on complex arrhythmias to pave a path for the adoption of robotics. We expect APT to contribute approximately $5 million in annual revenue during the first year post-acquisition. From a strategic perspective, I mentioned earlier how the lack of in-house catheter development and manufacturing expertise has been limited.
The opportunity for these differentiated high quality catheters in the U S is meaningful but requires a dedicated sales team, which stereotactic can provide with synergies from a practical and messaging perspective.
David Leo Fischel: So were your Texas has over 20 people in the field across the U S, who are particularly skilled and focused on enabling and improving the treatment of the most complex arrhythmias.
David Leo Fischel: Apt's catheters have the potential to contribute incremental value and revenue in the practices. Our team already calls upon and to serve as a door opener at centers focused on complex arrhythmias to pave a path for the adoption of robotics.
David Leo Fischel: We expect <unk> to contribute approximately $5 million in annual revenue during the first year post acquisition.
David Leo Fischel: From a strategic perspective.
David Leo Fischel: And earlier have a lack of in house catheter development and manufacturing expertise has been limited.
David Leo Fischel: APT's team, expertise, and capabilities will significantly amplify and accelerate Stereotaxis's next wave of innovation efforts as we look to develop a broader family of interventional devices that are navigated by our robots across a range of endovascular applications. I warmly welcome the APT team to Stereotaxis and look forward to their contribution as core members of our mission. While specific financial terms of the transaction are not being disclosed, the majority of the acquisition consideration is predicated on meeting key regulatory and commercial milestones.
David Leo Fischel: <unk> team expertise and capabilities will significantly amplify and accelerate their taxes. This next wave of innovation efforts as we look to develop a broader family of interventional devices that are navigated by a robust across a range of endovascular procedures.
David Leo Fischel: I warmly welcome the <unk> team to stereotactic and look forward to their contribution as core members and our mission.
David Leo Fischel: While specific financial terms of the transaction are not being disclosed the majority of the acquisition consideration is predicated on meeting key regulatory and commercial milestones.
David Leo Fischel: Those milestones include regulatory approvals for specific robotically-steered catheters, both in electrophysiology and endovascular applications, and revenue milestones that will play out over the coming five years and are predicated on meaningful growth and adoption of APT catheters. The upfront and milestone considerations can be paid fully in stock. The acquisition is expected to close in the third quarter, subject to customary closing conditions. I'll now hand the call over to Kim, who will provide commentary on our financial results, after which I'll make a few financial comments as well before opening the call to Q&A. Kim? Thank you, David, and good bye.
David Leo Fischel: Those milestones include regulatory approvals for specific robotically steered catheters, but within electrophysiology and endovascular applications and revenue milestones that will play out over the coming five years and are predicated on meaningful growth and adoption of AT&T catheters.
David Leo Fischel: The upfront and milestone considerations can be paid fully in stock.
David Leo Fischel: The acquisition is expected to close in the third quarter subject to customary closing conditions.
David Leo Fischel: I'll now hand, the call over to Kim who will provide commentary on our financial results after which I'll make a few financial comments as well before opening the call to Q&A Kim.
Kimberly R. Peery: Thank you, David, and good afternoon, everyone. Revenue for the first quarter of 2024 totaled $6.9 million, a growth of 5% from $6.5 million in the prior year's first quarter. System revenue for the first quarter was $2.6 million, and recurring revenue was $4.3 million compared to $1.8 million and $4.7 million in the prior year first quarter. System revenue in the quarter reflects revenue recognition on the delivery of a Genesis system and partial revenue recognition of other ancillary systems. Recurring revenue continues to be pressured by Johnson & Johnson's catheter shortage. Growth margin for the first quarter of 2024 was 58% of revenue. Recurring revenue growth margin was 76%, and system growth margin was 27%.
Kim: Thank you David and good afternoon, everyone.
David Leo Fischel: Operating expenses in the quarter of $8.7 million included $2.6 million in non-cash stock compensation expenses. Excluding stock compensation expense, adjusted operating expenses were $6.1 million, compared to prior year adjusted operating expenses of $6.9 million. The lower adjusted operating expenses reflect natural reductions in spending on various R&D projects as they have neared fruition and a general effort to be financially prudent across the organization, partially offset by increased clinical trial and regulatory
Kim: Revenue for the first quarter at 2024 totaled $6 9 million.
Kim: With a 5% and $6 5 million in the prior year first quarter system revenue for the first quarter was two 6 million and recurring revenue was $4 3 million compared to one 8 million and $4 7 million in the prior year first quarter.
Kim: System revenue in the quarter reflects revenue recognition on the delivery of the Genesis system and partial revenue recognition of other ancillary systems.
Kim: Revenue continues to be pressured by Johnson and Johnson catheter, Sean again.
Kim: Gross margin for the first quarter of 2024 with 58% of revenue recurring revenue gross margin was 76% and system gross margin was 27%.
Kim: Operating expenses in the quarter of $8 7 million, including $2 6 million and noncash stock compensation expense.
Kim: Excluding stock compensation expense adjusted operating expenses were $6 1 million compared to prior year adjusted operating expenses of $6 9 million.
Kim: The lower adjusted operating expenses reflect natural reductions in spending on various R&D projects as they have near term patience and a general effort to be financially prudent across the organization, partially offset by increased clinical trial and regulatory spending.
David Leo Fischel: Operating loss and net loss for the first quarter of 2024 were $4.7 million and $4.5 million, compared to $5.6 million and $5.3 million in the previous year. Adjusted Operating Loss and Adjusted Net Loss for the quarter, excluding non-cash stock compensation expense, were $2.2 million and $1.9 million, compared with $3 million and $2.7 million in the previous year. Negative free cash flow for the first quarter was $2.3 million. On March 31st, we had cash and cash equivalents of $18.2 million and no debt.
Kim: Operating loss and net loss for the first quarter of 2024, 7 million and $4 5 million compared to $5 6 million and $5 3 million in the previous year.
Kim: <unk> operating loss and adjusted net loss for the quarter, excluding noncash stock compensation expense of 2.2.
Kim: $2 million, and $1 9 million compared with $3 million and $2 7 million in the previous year negative.
Kim: Negative free cash flow for the first quarter was $2 3 million.
Kim: At March 31, we had cash and cash equivalents of $18 2 million and no debt I will now hand, the call back to David.
David Leo Fischel: I will now hand the call back to David.
Kim: Yeah.
David Leo Fischel: Thank you Kim.
David Leo Fischel: We are continuing to advance our technology and strategy in a financially prudent fashion. The first quarter is generally the highest cash burn quarter of the year, and we expect the remainder of the year to have a lower rate of cash utilization, even incorporating the expenses associated with acquiring, integrating, and operating APT. Estimating revenue in any given period remains a challenge, and we are still too early in the quarter to provide a reliable estimate for this quarter.
David Leo Fischel: We're continuing to advance our technology and strategy in a financially prudent fashion. The first quarter is generally the highest cash burn quarter of the year and we expect the remainder of the year to have a lower rate of cash utilization, even incorporating the expenses associated with acquiring integrating and operating ADT.
David Leo Fischel: Estimating revenue in any given period remains a challenge and we are still too early in the quarter to provide a reliable estimate for this quarter as we look out at the full year, we continue to expect modest double digit revenue growth.
David Leo Fischel: As we look out at the full year, we continue to expect modest double-digit revenue growth for the full year, driven by revenue recognition of system backlogs and new system orders and not incorporating the contribution of revenue from APS. We look forward to now taking your questions. Operator, can you please open the line?
David Leo Fischel: Full year, driven by revenue recognition of sit in backlog and new system orders and not incorporating contribution of revenue from ADT.
Speaker Change: We look forward to now taking your questions. Operator can you. Please open the line.
Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Frank Takkinen with Lake Street Capital Markets. Please go ahead.
Speaker Change: Thank you we will now begin the question and answer session.
Speaker Change: And I would like to ask a question. Please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question simply press Star. One again, if you are called upon to ask your question and our listening via loud speakers device bleached pick up your handset and ensure that your phone is not on mute when asking your question.
Speaker Change: Again press star one to join the queue and your first question comes from the line of Frank <unk> with Lake Street Capital markets. Please go ahead.
Frank James Takkinen: Great, thanks for taking the questions. Congratulations on the progress. I was hoping to start with one on APT, maybe just talking about the current catheters you have in Development Magic and then the Guidewire. Is there any immediate Synergistic help that they can provide with any of these products? Are those pretty much form factors locked down, sticking with ASAPICA for manufacturing, and APT is more for future development, such as the robotic Mapping catheter? Just kind of curious how it can impact the business today.
Frank: Great. Thanks for taking the question congrats on the progress was hoping to start with one.
Frank: APG.
Frank: Maybe just talking about current catheters, you have in development Magic and Guidewire is there any immediate.
Frank: Synergistic helps that they can provide with any of these products are those pretty much form factors lockdown sticking with our speaker for manufacturing and <unk> is more for future developments such as the robotic mapping catheter just trying to kind of curious how it can impact the business today.
David Leo Fischel: Hi Frank. Good afternoon.
Hi, Frank Good afternoon. Thanks for the question and so we obviously have a good long term relationships with existing contract manufacturing partners and we don't plan to make any changes. We plan continued long term relationships with those partners. So this acquisition is really not relevant for the magic catheter.
David Leo Fischel: Thanks for the question. We obviously have good long-term relationships with our existing contract manufacturing partners, and we don't plan to make any changes. We plan to have continued long-term relationships with those partners, so this acquisition is really not relevant to the Magic Catheter or Guidewire at this stage. We're really looking towards both the Diagnostic EP Catheter, the Guide Catheter, and then a series of additional disposable sterile interventional devices as we look towards the future.
Frank: Guidewire at this stage.
Frank: Really looking towards.
Frank: Both the diagnostic EP catheter the guide catheter and then a series of additional disposable sterile intervention devices as we look towards the future.
David Leo Fischel: Okay, fair enough. That makes sense. And then maybe we could shift over to the PMA change related to the magic catheter. Can you give a little bit more background on the switch from a PMA supplemental to a full PMA and how that might impact needed data for that submission and timeline?
Frank: Okay fair enough that makes sense and then maybe shifting over to the PMA change related to the magic catheter can you give a little bit more background on the switch from a PMA supplemental to a full PMA and how that might impact needed data for that submission and timelines.
David Leo Fischel: Sure, so from the point of view of the timeline for the submission, that is kind of the same as what it was before. FDA converted it internally on their side from the PMA supplement to a traditional PMA. There are certain things that are not allowed during a PMA supplement but are kind of supported by a traditional PMA, like, for example, auditing manufacturing facilities as part of the review process that were important to do, and those helped drive the decision for the conversion.
Speaker Change: Sure so and so from our point of view of the timeline for the submission that is that is kind of this is kind of the same as what it was before FDA converted it internally on their side from the PMA supplement to a traditional PMA and there are certain things that are not.
Speaker Change: <unk>.
Speaker Change: Allowed during the PMA supplement, but our our kind of supported by a traditional PMA like for example, auditing manufacturing facilities as part of the review process and that were important to do and those those helped drive the decision for the conversion and <unk>.
Speaker Change: So we had.
David Leo Fischel: And so we had a good collaborative discussion with FDA after they received our PMA supplement submission and kind of discussed some of what would be important in order to allow FDA to do a comprehensive review. They felt that that change would be beneficial. And as kind of described in my prepared remarks, we still anticipate the existing data that we've been collecting to be sufficient for the submission. And so that is obviously helpful in the overall timeline and process.
Speaker Change: Good collaborative discussion with FDA after they received our PMA supplement submission and.
Speaker Change: And kind of a nice discussing some of what would be important.
Speaker Change: In order to allow FDA to do a comprehensive review.
Speaker Change: A solid but that change will be beneficial.
Speaker Change: <unk>.
Speaker Change: Kind of described in my prepared remarks.
Speaker Change: We anticipate still existing data that we've been collecting to be and to be sufficient for the submission and so that is obviously.
Helpful.
Speaker Change: Overall timeline and process and so I think.
Speaker Change: And we've been fortunate to be able to ask collaborative relationships with the regulators both in the U S and Europe and to be able to.
David Leo Fischel: And so I think we've been fortunate to be able to have a collaborative relationship with the regulators, both in the US and Europe, and to be able to kind of advance things in a fashion that is looking for the right solutions that allow a comprehensive review in a timely fashion.
Speaker Change: To kind of advance things in a fashion that is looking for the right solutions to allow a comprehensive review.
In a timely fashion.
David Leo Fischel: Okay, got it. And then last one, maybe just on the capital equipment environment, any update you can provide there as it relates to installation timelines, construction variability, ordering patterns, or hesitancies around it, given some of the macro.
Speaker Change: Okay got it and then last one maybe just on the capital equipment environment any update you can provide there as it relates to installation timelines construction variability ordering patterns or.
Speaker Change: Hesitancy around it given some of the macro elements.
David Leo Fischel: There's nothing major to speak about there. I think that we're still kind of in this middle ground. There are obviously challenges and headwinds, both in the macro environment and given our product ecosystem. But there are also the tailwinds of general interest and demand in our technology and watching our innovation strategy come closer to fruition. And so I think kind of there's that balancing act between both of those. We're able to make some progress given the gives and takes there.
Speaker Change: Nothing major to speak about there I think that we're still kind of in this middle ground. There is obviously challenges and headwinds both in the macro environment and given our product ecosystem.
Speaker Change: There is there is also the <unk>.
Speaker Change: <unk> of general interest and demand in our technology and watching our innovation strategy come closer to fruition and so I think kind of theirs that balancing out to both of those we're able to create some progress given the gives and takes there and it's obviously not the type of that scale of progress that we that we.
David Leo Fischel: It's obviously not the type of scale of progress that we ultimately want to be able to show. And that's why we have our innovation strategy and look forward to being able to actually start to bring that out into the real world.
Speaker Change: Ultimately want to be able to show in that and Thats why we have our innovation strategy and look forward to being able to actually start to bring that out into the real world.
David Leo Fischel: Got it. Okay. Thanks for taking the questions.
Speaker Change: Got it okay. Thanks for taking the questions.
Speaker Change: Thank you.
Jason Hart Wittes: Your next question comes from the line of Jason Wittes with Fraud MKM. Please go ahead.
Speaker Change: Your next question comes from the line of Jason Wittes with Rod MGM. Please go ahead.
David Leo Fischel: Hi, thanks for taking the questions and congratulations on the progress here on all the submissions. Just a follow-up on the PMA conversion to a traditional PMA. How does that affect timing? Is there a few extra months added, or both in terms of just converting this to a traditional PMA and the additional steps that might be required for the full submission?
Jason Hart Wittes: Hi, Thanks for taking the questions and congrats on the progress here on all of the submissions.
Jason Hart Wittes: Just on the just a follow up on the PMA.
Jason Hart Wittes: Version to a traditional PMA.
Jason Hart Wittes: How does that affect timing is there a few extra months added or.
Jason Hart Wittes: In terms of just burning us or traditional PMA.
Jason Hart Wittes: The additional steps that might be required.
Jason Hart Wittes: For the full submission.
David Leo Fischel: Hi Jason, good afternoon, thanks. As I described on our last call, we view the submission to FDA not as an event where we submit something, sit back, and then wait for the statutory clock to play out and then get a result. This is really part of a continuous dialogue and collaborative engagement on the regulatory process. And so I think that's exactly what has played out over the last two months since our last call.
Jason Hart Wittes: Hi, Jason Good afternoon, Thanks, and so as I as I described on our last call. We view this submission to FDA not.
Jason Hart Wittes: An event, where we submit something.
Jason Hart Wittes: Back and then wait.
Jason Hart Wittes: Statutory clock to play out and then get them resolved. This is really part of a continuous dialogue and Dan and collaborative engagement.
Jason Hart Wittes: On the regulatory process and so I think that's exactly what played out over the last two months since our last call and we're pleased with the.
David Leo Fischel: And we're pleased with the responsiveness of the agency to our submission. I think it was a particularly quick review and outreach to have a follow-up call and brainstorming on what the best path would be going forward. The conversion to the traditional PMA documentation, the payment of that application, all played out already, and now there is the initial review taking place of the traditional PMA application. And the statutory timeline again is, I believe, the six-month timeline with the ability for there to be stops during questioning.
Jason Hart Wittes: The responsiveness of the agency to our submission I think it was particularly quick.
Jason Hart Wittes: Review and outreach to have a follow up call and brainstorming on what the best path would be going forward as a conversion to the traditional PMA documentation the payment of that application all played out already and now there is the.
Jason Hart Wittes: Initial review taking place of the traditional PMA application and the statutory timeline again, it's bill.
Jason Hart Wittes: <unk> believes the six month timeline with the ability for there to be stops during questioning but again I think about this much more as a process and I think that given kind of.
David Leo Fischel: But again, I think about this much more as a process, and I think that given the kind of engagement to date, I'm pleased with how we're able to find paths forward to make sure that this important device is available for patients and physicians in the U.S.
Jason Hart Wittes: The engagement to date diluted I am pleased with how we're able to to find paths forward to make sure that this important devices available for patients and physicians in the U S.
David Leo Fischel: Oh, okay. Thank you. That's helpful.
Speaker Change: Okay. Thank you.
Speaker Change: That's helpful and then on the <unk> acquisition it sounds like.
David Leo Fischel: And then on the APT acquisition, sounds like... a pretty good addition from a technological standpoint for you guys. You mentioned they have, it sounds like they have quite a few unique catheters. It sounds like, from your description, they're primarily sold in Europe at this point. So just the plan here, is it to convert those unique catheters to the robotic platform and sell them sort of alongside the robotics and also, or do you also plan to sell the manual parts in the U.S. as well?
Speaker Change: Pretty good addition from a technological standpoint for you guys.
Mentioned they have it sounds like they have quite a few unique catheters, but it sounds like also from description there primarily sold in Europe. At this point. So just the plan here is it to convert those unique catheters to the robotics platform.
Speaker Change: Tell them.
Speaker Change: Sort of alongside with with the robotics.
Speaker Change: With robotics and also or do you also plan to sell Emmanuel.
Speaker Change: Parts in the U S as well.
Speaker Change: Sure so a little bit more color there.
David Leo Fischel: Sure, so a little bit more color there. APT makes a series of diagnostic, manually navigated handheld catheters used in cardiac ablation procedures. It has some catheters that kind of have high quality construction but are, from a design perspective, relatively similar to existing catheters out there. And then they have a few catheters that are fairly differentiated in providing kind of additional clinical value in specific styles of cardiac ablation procedures. They sell the catheters globally.
Speaker Change: Teammates.
Speaker Change: Of.
Speaker Change: Diagnostic.
Speaker Change: Manually navigated handheld.
Speaker Change: Catheters used in cardiac ablation procedures it has.
Speaker Change: It has some catheters, which are.
Speaker Change: Kind of has high quality construction, but from a design perspective are relatively similar to existing catheters out there and then they have a few catheters that are fairly differentiated and providing and kind of additional clinical value in specific styles.
Speaker Change: Cardiac ablation procedures, they sell the catheters globally.
David Leo Fischel: I say that actually their strongest region is a few countries in Asia, and then they have a decent amount of sales in Europe, and they have their weakest geography being the US, which is obviously interesting given that, typically, sales in the US kind of outshines other geographies.
Speaker Change: Hey that actually their strongest region is a few countries in Asia.
Speaker Change: And then they have decent.
Speaker Change: Decent amount of sales in Europe, and they have their weakest geography being the U S, which is obviously interesting given that typically sales in the U S.
Speaker Change: Kind of out shines other geographies.
David Leo Fischel: Currently, in robotic cardiac ablation procedures, manual handheld diagnostic catheters are always being used. There are no robotically steered diagnostic catheters that are available now or have ever been available. It's purely the ablation catheter, which is robotically steered. And so there's definitely the opportunity for their existing manually navigated catheters to be used in robotic procedures as they currently are and to be used more broadly in non-robotic procedures in the US at the accounts that we already call upon and where we have relationships.
Speaker Change: We.
Speaker Change: Currently in robotic cardiac ablation procedures.
Speaker Change: Daniel handheld diagnostic catheters are always being used.
Speaker Change: There are no robotically steer diagnostic.
Speaker Change: The catheters.
Speaker Change: That are available now or have ever been available.
Speaker Change: It's purely the ablation catheter, which is which is robotically steered and so there is definitely the opportunity for their existing manually navigated catheters to be used in robotic procedures as they currently are.
Speaker Change: And to be used more broadly a non robotic procedures in the U S. At the accounts that we already call upon in and where we have relationships.
David Leo Fischel: There is a specific diagnostic catheter that we have worked with, and that was, to some extent, the start of our relationship with APT that we've been working on to make robotically steered. And that is in the late stages of development and will be exciting to bring to market. That'll be the first time there's a robotically steered high-density diagnostic catheter available to our community, and so that is definitely part of the strategy, but there's value to be had from synergies, both from the existing portfolio of manual catheters and from that robotically steered variant in the future.
Speaker Change: There is a specific diagnostic catheter that we have worked with and that was to some extent the start of our relationship with HPT that we've been working with to make Robotically steered and that is in the late stages of development and will be will be exciting to bring to market that will be the first time.
David Leo Fischel: Thank you. And then just one more. For APT, I think you mentioned the initial payment is going to be through stock issuance. The additional milestones, are those cash or stock payments?
Speaker Change: Theres, a robotically steered high density diagnostic catheter.
Speaker Change: Available to our community and so that is definitely part of our strategy, but there is value to be add both in synergies both from the existing portfolio of manual catheters and from that Robotically steered variant in the future got.
Speaker Change: Got it. Thank you and then just one.
Speaker Change: On a more <unk> I think you mentioned in the initial <unk>.
Speaker Change: Payment is going to be through stock issuance.
Speaker Change: The addition, the additional milestones of those cash or stock payments.
David Leo Fischel: Those are all second stock stock-based payment paid by the miles. Got it. Thank you very much. I'll jump
Speaker Change: Those are all stock stock based payment paid upon the milestones.
David Leo Fischel: Got it. Thank you very much. I'll jump back in the queue.
Speaker Change: Got it thank you very much I'll jump back in queue.
Speaker Change: Thank you.
Adam Carl Maeder: Your next question comes from the line of Adam Maeder with Piper Sandler. Please go ahead.
Adam: Your next question comes from the line of Adam meter Piper Sandler. Please go ahead.
David Leo Fischel: Hi David, Kim, good afternoon, and thank you for taking the questions. Congratulations on the deal.
Adam Carl Maeder: Hi, David Kim Good afternoon, and thank you for taking the questions congrats on the deal.
Adam Carl Maeder: I wanted to follow up on the last line of questioning and ask about the commercial synergies. So, for complex AF ablation procedures today, and I guess specifically for complex arrhythmias, how many of those cases, or what percentage of those cases use diagnostic catheters? And then I'd also be curious to hear a little bit more about the competition on the diagnostic catheter side, who you're going to compete with there, and why APT technology wins. And I'd love a follow-up question or two. Okay, great.
Adam Carl Maeder: To follow up on the last line of questioning.
Adam Carl Maeder: Ask about the commercial synergies so for for complex AF ablation procedures today, and I guess, specifically for complex arrhythmias.
Adam Carl Maeder: Many of those cases are what percentage of those cases use diagnostic catheters and then I'd also be curious to hear a little bit more about the competition on the diagnostic catheter side, who are you going to compete with there and why does the APC technology win and I had a follow up or two okay.
David Leo Fischel: Okay, great. Hi Adam.
Speaker Change: Okay, Great Hi, Adam Thanks for the question and so so diagnostic catheters are used in and in almost every cardiac ablation procedure as they are widely utilized there are obviously some of the high density mapping catheters like Panther array a $4.
David Leo Fischel: Thanks for the question. So, diagnostic catheters are used in almost every cardiac ablation procedure. They're widely utilized. There are obviously some of the high-density mapping catheters like Pentarray or an HD grid catheter that have driven significant commercial growth for companies like J&J and Abbott. And there are also all sorts of catheters that sit in the blood vessels surrounding the coronary vessels surrounding the heart and give you electrogram data from those regions. And so there's kind of a broad array of such catheters.
Speaker Change: HD grid catheter that Ara has driven significant.
Speaker Change: Commercial growth for companies like <unk>.
Speaker Change: J J and Abbott and Theres also all sorts of catheters that fit in.
Speaker Change: Blood vessels surrounding the coronary vessels surrounding the heart and give your electrogram data from this from those regions.
And so there is kind of all broad array of such catheters and in some ways. These catheters will compete against particularly catheters that sit in the coronary sinus or in some of the vessels surrounding the heart during the procedure and there are a few.
David Leo Fischel: And in some ways, these catheters will compete against particular catheters that sit in the coronary sinus or in some of the vessels surrounding the heart during the procedure. And there are a few catheters, as I mentioned, that are particularly differentiated in their design and capability and add value in cases where we are also adding predominantly the value of a robot. And those are kind of some of the complex ventricular tachycardia, some of the complex ventricular cases, and congenital pediatric cases.
Speaker Change: <unk> catheters as I mentioned that are particularly differentiated in their design and capability and add value in cases, where we add.
Speaker Change: We are also adding predominantly the value for a robot and those are kind of some of the complex been trickier tachycardia, some of the complex and triple or cases and.
Speaker Change: Congenital pediatric cases, and so that's kind of where the synergy will be most applicable our goal is not to try to have.
David Leo Fischel: And so that's kind of where the synergy will be most applicable. Our goal is not to try to have a broad array of every product that gets used in every cardiac ablation procedure. We want to remain laser-focused on advancing and enabling the most complex cardiac ablation cases and really adding differentiated value to the field of EP. And I think these catheters that share that type of messaging. And so our goal is not to become kind of a generic catheter distributor but really to add value in a differentiated way.
Speaker Change: Broad array of every product that gets used in every cardiac ablation procedure, we want to remain laser focused on advancing and enabling the most complex cardiac ablation cases, and really adding differentiated value to the field as EP I think these catheters.
Speaker Change: Sure that type of messaging and so our goal is not to be come kind of generic.
Speaker Change: Catheter distributor, but add but really tied value in a differentiated way.
David Leo Fischel: And again, there's the commercial synergy, and then there's the strategic synergy in terms of bringing in an in-house development and manufacturing capability, which I think will provide a lot of value over the next several years as we really build out the razor blade aspect of the business in a far more robust fashion than what we previously discussed.
Speaker Change: And again, there is a commercial synergy and then Theres a strategic synergy in terms of bringing in an in house development.
Speaker Change: And manufacturing capability, which I think will provide a lot of value over the next several years as we really build out the razor blade aspect of the business in a far more robust fashion than what we previously discussed.
David Leo Fischel: Got it. That's a very helpful color, David. Thank you for that. And then just one quick clarification, the five million revenue contribution from APT, did I interpret that correctly as being for calendar year 2025, or is that for 12 months from close, which I think is expected in Q3.
Speaker Change: Got it.
Speaker Change: Helpful color David Thank you for that and then just one quick clarification, the $5 million revenue contribution from AP did I interpret that correctly as dean for calendar year 2025 or is that for 12 months from close which I think is expected in Q3.
David Leo Fischel: That would be for the first year post-closure, so let's see, that might be three months, four months, five months before the end of this year, but kind of for the first year of full ownership.
Speaker Change: That would be that would be for the first year post closure so.
Speaker Change: Let's see that might be three months four months five months before before the end of this year, but kind of for the first year of full ownership.
David Leo Fischel: Okay, understood. And just one last one, just curious.
Speaker Change: Okay understood and just one last one just curious.
David Leo Fischel: From an APT standpoint, do they have any pipeline initiatives that are targeting pulse field ablation or any tech or IP that, you know, could potentially be helpful there? And, you know, if not, just curious kind of how the company is thinking about pulse field ablation and the importance there of potentially adding that to the portfolio over the long term. Thanks so much for taking the question.
Speaker Change: From an <unk> standpoint.
Speaker Change: Do they have any pipeline initiatives that are targeting pulsed field ablation or any tanker IP that could potentially be helpful. There.
If not just curious kind of how the company is thinking about pulse field ablation the importance there.
Speaker Change: Adding that to the portfolio over the long term. Thanks, so much for taking the questions.
David Leo Fischel: Sure, thanks a lot, Adam. AT&T actually has done some work in PFA with one of the very prestigious hospitals in the United States. They do have some IP there, and they have done kind of various clinical trials with a differentiated catheter that they built in conjunction with the physicians at that institution, and so there are some assets in the PFA world that come with this acquisition.
Speaker Change: Sure. Thanks, a lot Adam So so agency actually has done.
Speaker Change: Some work in there.
Speaker Change: PFA with one of the very prestigious hospitals in the United States as they do have some IP there and they do have that they've done kind of various clinical trials with differentiated catheter that they've built in conjunction with the physicians at that institution and answer.
Speaker Change: There is there's some assets in the PSA world that come with this acquisition.
David Leo Fischel: Outside of APT, we have – as we've talked about in the past, we have been working with a few companies to explore robotically steered catheters that can deliver PFA during procedures both in the atrium and in the ventricle. We actually have a few animal studies with two different companies planned for the next call it one to three months looking forward, and so there is kind of some meaningful work going on there, and when there's something kind of more material where we can provide an actual timeline on when the first PFA catheter is either able to approach the market or approach a human study, we'll update you guys further.
Speaker Change: Outside of ATT.
Speaker Change: We have as we've talked in the past we have been working with.
Speaker Change: Few companies to explore robotically steered catheters that can deliver PFA.
Speaker Change: During procedures, both in the atrium and then the ventricle and we actually have most few animal studies with two different companies at planned for the next call. It one to three months.
Speaker Change: Looking forward and so there was kind of there is some meaningful work going on there and when there is something kind of more material. What we can provide an actual timeline on when the first PFA catheter.
Speaker Change: Is able to approach the market or approach to human study will update you guys further.
David Leo Fischel: Good color there, thank you.
Speaker Change: Good color there. Thank you.
Speaker Change: Thank you.
Joshua Thomas Jennings: Your next question comes from the line of Josh Jennings with T.D. Cowan. Please go ahead.
Speaker Change: Your next question comes from the line of Josh Jennings with TD Cowen. Please go ahead.
David Leo Fischel: Hi, good afternoon. Thank you. All right. Let's open another APP follow-up. Just with the high-density mapping or all the diagnostic mapping patterns in the portfolio, are they integrated into a High Density or 3D anatomic mapping system, or are they compatible with current mapping systems that are out and commercialized, or how does that whole integration work and play out as you advance this platform?
Joshua Thomas Jennings: Hi, Good afternoon. Thank you I was hoping to another <unk> follow up.
Joshua Thomas Jennings: Just with the high density mapping all the diagnostic catheters in the portfolio.
Joshua Thomas Jennings: Z integrated into <unk>.
Joshua Thomas Jennings: Hi, Steve.
Joshua Thomas Jennings: Thomas mapping system or are the compatible with with current mapping systems.
Joshua Thomas Jennings: And commercialized or how does that whole.
Joshua Thomas Jennings: Immigration.
Joshua Thomas Jennings: And played out as we advance this platform.
David Leo Fischel: Hi Josh. Good afternoon.
Joshua Thomas Jennings: Hi, Josh Good afternoon, very good question. So so apt's catheters are.
Joshua Thomas Jennings: Currently compatible with a range of not being systems out there.
David Leo Fischel: Very good question. So APT's catheters are currently compatible with a range of mapping systems out there. You're correct that the primary high-density mapping catheters, like an HDGrid or Pentarray, generally have to be fully integrated with the mapping system. There are, though, ways to pin various secondary diagnostic catheters, things like a coronary sinus catheter, into the various mapping systems without them being fully integrated but being compatible. And so that is kind of very much a part of this industry, and that's how the catheters are currently being used.
Joshua Thomas Jennings: Correct that the primary high density mapping catheters like an HD grade of penetrate our AG generally have to be fully integrated with <unk> with the mapping system. There are ways to pin various secondary diagnostic catheters things like a coronary sinus catheter.
Joshua Thomas Jennings: Into the various mapping systems without it being fully integrated for being compatible and so that is kind of a very much a part of this industry and that's how the catheters are currently being used.
David Leo Fischel: And then just wanted to ask about the pipeline as we're moving forward, making progress to getting the mobile system approved. Just, I think you made some comments in your prepared remarks, David, but just how is the pipeline shaping up, EUS and OUS, as we sit here today in 2Q24 versus maybe a year ago?
Joshua Thomas Jennings: And then just wanted to.
Speaker Change: To ask about.
Speaker Change: The pipeline as we are.
Speaker Change: Moving forward, making progress too.
Speaker Change: Getting the multiple system approved.
Speaker Change: I think you made some comments in your prepared remarks, too, but just how is the pipeline shaping up.
Speaker Change: U S and O U S. As we sit here today.
Speaker Change: Q4 versus maybe a year ago.
David Leo Fischel: So overall, we're, I mean, from a development perspective on the robot side, we're delighted with how it's progressing. The device is working nicely in the testing.
Speaker Change: So overall, we're I mean from a development perspective on the.
Speaker Change: The robot side, we're delighted with how it's progressing the device is working nicely in the testing, we're kind of methodically grinding through all of the tests necessary.
David Leo Fischel: We're kind of methodically grinding through all of the tests necessary, and we've started to share the system with visitors to our office. And the system is looking more and more as we receive the covers and have the LED lights and everything else. It starts to look more and more like a real commercial system.
We've started to show the system with visitors to our office and the system is looking more and more as we received the covers and have the led lights and everything else. It starts to look more and more like a real <unk>.
Speaker Change: <unk> system.
David Leo Fischel: And so we're kind of happy with how that looks. From a pipeline in the field perspective, I'd say that Europe is starting to, as kind of the first geography where we would expect the magic catheter to come approved and the newer robot to come approved, take the lead in terms of pipeline development. It also benefits from the availability of a newer, more modern X-ray that is available in Europe now, and we just completed the first installation in Italy.
Speaker Change: And so kind of we're happy with how that looks from.
Speaker Change: The pipeline in the field perspective, I'd say that.
Speaker Change: Europe is starting to as kind of the first geography, where we would expect the magic catheter become approved and.
Speaker Change: The newer robot to come approved that is taking the lead in terms of the pipeline development.
Speaker Change: It also benefits from the availability of.
Speaker Change: Newer more modern X ray that is available in Europe now in which we just completed the first installation of.
David Leo Fischel: And so there is kind of an improving pipeline, I'd say there. And overall, I think we have kind of a good pipeline. We've not yet been able to go out in a robust way to commercialize and aggressively market this new ecosystem and this kind of concept of having a robot that doesn't require construction and that can be adopted more easily with various ways of being adopted, whether it's a capital sale or a lease or a placement with disposable commitments.
Speaker Change: In Italy, and so there is.
Speaker Change: There was kind of an improving pipeline I'd say there.
And overall I think we have that we've kind of a good a good pipeline, we have not yet been able to go out in a robust way to to commercialize and market aggressively this new ecosystem.
Speaker Change: And this kind of concept of having a robot that doesn't require construction and that can be adopted more easily with various ways of being adopted whether its a capital sale or a lease or a placement with disposable commitment and so there is kind of events. We are looking forward to being able to do that we're doing.
David Leo Fischel: And so there is kind of, we are looking forward to being able to do that. We're doing some preparatory work to make sure we have a good pipeline as we're able to do that more fully. But we haven't obviously gone out yet until we have the approvals and are ready to do so.
Speaker Change: Some preparatory work.
Speaker Change: As to make sure we have a good pipeline as we're able to do that more fully but we havent, obviously gone out yet until we have the approvals and are already to do so to do that more fully.
David Leo Fischel: And maybe just a similar question or follow-up question on just China that collaborates with Mike Rapport and just when should we be expecting orders to start flowing through their sales force and that combined effort? Thanks.
Speaker Change: Maybe just to.
Speaker Change: So my question for a follow up question on just China, the collaboration with Microsoft.
Speaker Change: And just when should we be expecting.
Speaker Change: So to start flowing through to their sales forces and that combined effort. Thanks a lot.
David Leo Fischel: So Microport still expects Genesys approval in the summertime, and by the end of the year, expects to have its catheter that's integrated with its mapping system and us approved. I think about it in two steps.
Speaker Change: So Michael Port.
Michael Port: Is it still expects Genesis approval in the summer time.
Michael Port: And by the end of the year expects to have its catheter and as.
Michael Port: <unk> with its mapping system in us approved I think about it probably in two steps.
David Leo Fischel: Having Genesys approved in China will be very helpful to start to allow some of the capital activity to flow. Having the full ecosystem available with the catheter will allow the broader Microport sales team to really participate in the commercial activities. So while Microport has a relatively smaller capital sales team that has been active and is kind of and will be particularly motivated and capable when Genesys is approved, we are starting to train both in group settings and one-on-one settings for actually every single one of them, all approximately 100 people on the Microport EP clinical sales team.
Michael Port: Having genesis approved in China will be very helpful to start to allow.
Michael Port: Some of the capital activity to flow in.
Michael Port: Uh huh.
Michael Port: Having the full ecosystem available with the catheter will allow the broader micro port sales team to really actually participate in the commercial activities. So while Mike report has a relatively smaller capital sales team that has been active and as is.
Michael Port: And we'll be particularly motivated and capable when Genesis is approved we are starting to train.
Michael Port: Both group settings, and one on one settings for actually every single one of them.
Michael Port: Approximately 100.
Michael Port: People on the microphone EP clinical sales team.
David Leo Fischel: And as the catheter is approved, that provides really the impetus for that entire team to talk with their daily customers and to try to drive adoption of their mapping system and their catheter portfolio using the robot as kind of this differentiating linchpin. And so I think about it in terms of those two phases, particularly excited for that second phase, but I think there'll be some impact from the first phase.
Michael Port: As the catheter is approved that provides really the impetus for that entire team to talk with their daily customers and to try to drive adoption of their mapping system and their catheter portfolio using the robot as kind of this differentiating linchpin and so I think.
Michael Port: It kind of in those two phases.
Michael Port: Particularly excited for that second phase, but I think there'll be some impact from the first phase.
Okay.
Michael Port: Okay.
David Leo Fischel: All right, that concludes our Q&A session. I will now turn the conference back over to David Fischel for closing remarks.
Michael Port: Alright that concludes our Q&A session I will now turn the conference back over to David Fisher for closing remarks.
David Leo Fischel: Okay, thank you very much for your questions. We look forward to working hard on your behalf to achieve key milestones prior to when we speak next quarter. Thank you.
David Leo Fischel: Okay. Thank you very much for your questions. We look forward to working hard on your behalf to realize key milestones prior to when we speak next quarter. Thank you.
Operator: Ladies and gentlemen, that concludes today's conference call. Thank you all for joining us. You may now disconnect.
Speaker Change: Ladies and gentlemen that concludes today's conference call. Thank you all for joining you may now disconnect.
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